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The Trump donor that Biden can't fire is directly destroying the U.S. Postal Service, exactly what everyone warned about when he was confirmed in the depths of the pandemic.

The Trump donor that Biden can't fire is directly destroying the U.S. Postal Service, exactly what everyone warned about when he was confirmed in the depths of the pandemic.

 


Technology has given us the ability to connect with almost anyone, anytime, for free. But there's just something nostalgic and tactile about receiving a letter or postcard in the mail, whether it's a wedding invitation or a postcard from a loved one distant.

But many also have a love-hate relationship with the United States Postal Service. Mail is lost, undelivered, or even returned, sometimes with a valid postmark and address. Indeed, the Postal Service's ability to provide acceptable service is an ongoing concern in the United States, according to the United States Postal Service Office of Inspector General.

Still, the USPS announced a proposal Tuesday to increase the price of stamps by 8 percent, which would bring the cost of a permanent first-class stamp to $0.73. It's just another sign of the unfavorable leadership of Postmaster General Louis DeJoy, who was appointed by the Trump administration and confirmed by an entirely Trump-appointed board. DeJoy was a major Republican Party donor and Trump fundraiser and also served as the first postmaster general in two decades with no prior USPS experience.

Under DeJoy, the USPS lost money. In the first quarter of fiscal 2024 alone, the USPS reported a net loss of $2.1 billion, more than double its $1 billion net loss during the same period of the year. 'last year. (A USPS spokesperson said its financial situation had improved, pointing to a progress report that showed USPS projected losses for the decade falling to $70 billion, from $160 billion dollars previously, and said the agency plans to break even by 2030.)

Under DeJoy, the USPS failed to adequately control labor costs, while quality of service declined and prices increased, said Robert D. Atkinson, president of Information Technology and Innovation Foundation, a think tank specializing in productivity and innovation issues. . This situation is not sustainable, and as prices increase, volumes decrease, until the USPS enters a death spiral.

But DeJoy, who was previously the subject of an FBI investigation in connection with past political fundraising, says he has a 10-year plan to revive the Postal Service. He has held office since June 2020 and plans to serve his entire term. Additionally, President Joe Biden does not have the authority to remove him from office, despite the agency's struggles.

Get used to me, DeJoy said in February 2021. The Postmaster General is appointed by the Postal Service Board of Governors and can only be removed by that group, not the president. However, governors are appointed by the president, and in 2022, 83 public interest groups led by the Save the Post Office Coalition sent a letter to Biden urging him to nominate nominees to the board of governors for positions that would hold DeJoy responsible for his destructive leadership and strongly advocate for the expansion of USPS services.

The president's nominees should offer a diversity of life experiences to more accurately represent both postal workers and the nation as a whole, not just another wealthy white man like Louis DeJoy, said Porter McConnell, co-founder of the Save the Post Office Coalition, in a press release.

In 2022, the USPS Board of Directors added two new members appointed by President Biden and approved by the Senate.

Why the USPS Keeps Raising Prices

This is the second time in six months that the USPS has requested a service price increase, with the most recent increasing shipping service rates by 5.4% in November 2023.

Price changes in the mail and shipping market continue, [and] These price adjustments are necessary to achieve the financial stability sought by the organization's 10-year plan Delivering for America, a USPS spokesperson told Fortune. Postal service rates remain among the most affordable in the world.

While that may go beyond the surface level, as part of DeJoy's master plan to address poor service across the country, the entity likely won't be able to continue raising prices indefinitely, experts say.

The USPS raises its prices because it is constantly losing money on its operations and subsidizing the USPS with general tax money is unpopular and unnecessary, Stephen Henn, an assistant professor of economics and economics, told Fortune. in finance at the University of the Sacred Heart. Additionally, USPS may not be as profitable as FedEx or UPS because the cost of sending letters and packages is still comparatively much cheaper than using a for-profit option.

Some of the factors contributing to USPS user dissatisfaction and overall decline in productivity include reduced mail volumes, increased operating costs and a rapid transition to digital communications, Robert Khachatryan said. , CEO of Freight Right Global Logistics, to Fortune.

Under DeJoy's 10-year plan, he hopes to modernize operations and improve competitiveness in the transportation and mail sector as mail volumes decline, Khachatryan said. But it also seeks to add funding to address current challenges to USPS services across the country. Nearly all U.S. states are below target levels for on-time service, according to data from the U.S. Postal Service Office of Inspector General.

The pressure for price increases stems in part from the ongoing challenge of maintaining acceptable service levels, Khachatryan says. Reports from the Office of Inspector General highlight that service is a persistent concern, suggesting that additional revenue from higher prices could be devoted to improving operational efficiencies and customer service.

Additionally, USPS has requirements that for-profit companies like FedEx and UPS do not enforce. The USPS must deliver first-class mail to every address in the United States at the same rate, despite the distance.

Sending Grandma a holiday card costs the same whether it's sent from Maine to New York or from Maine to Hawaii, Henn says. For-profit companies can charge based on the cost of delivery from Maine to New York or Hawaii.

A USPS spokesperson also noted that the agency is grappling with a universal reduction in advertising spending, significant inflation costs and the continued existence of inappropriate allocation from the Civil Service Retirement System . These problems have led to $6 billion in unanticipated costs for 2023, DeJoy said in a 2023 speech. However, at 73 cents, the price of first-class stamps will have increased 32% since 2019, much faster than the overall inflation rate. .

Despite the challenges of competing with for-profit organizations, DeJoy remains confident he can save the struggling agency in the years to come.

I am increasingly confident in our ability to provide the nation with postal service whose best days are in the future, DeJoy told the USPS Board of Governors in February. We are in a race to a finish line that will change our financial and service trajectory before we run out of cash and need other means of financing.

But other experts don't have such a rosy view of the agency, which technically operates independently of the executive branch of the U.S. federal government.

The Postal Regulatory Commission needs to stop being so passive and start holding the USPS accountable to reduce costs and improve efficiency, Atkinson says. Congress may need to intervene as well, because the current trend is not sustainable.

Clarification, April 11, 2024: This article has been updated to explain that Postmaster General DeJoy was appointed by former President Trump before being appointed by the USPS Board of Governors and to add more details on USPS board members and its costs and revenues.

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